Vermont looking to transform health care system as costs rise

MONTPELIER – While Vermont looks to restructure how it pays for education and permits housing, it's also looking at changes in health care, as that, too, becomes unaffordable for many.

Gov. Phil Scott said Wednesday at a news conference that the state has taken some action in the past few years to make health care more affordable and is looking to go further. He said his administration has some proposals aimed at increasing competition and expanding options, thereby lowering prices.

Kaj Samsom, commissioner of the Department of Financial Regulation, said health insurance is expensive for individuals and businesses. He said he testified that morning before the House Committee on Health Care on H.585, "H.585, an act relating to health insurance reforms." He said the bill has a number of pieces to it, but they all relate to either cost containment, who governs domestic insurers, and options for individuals.

According to Samsom, Vermont is one of two states that doesn't allow age to be considered in one's health care premiums. This has become unsustainable, as Vermont borders two states — New Hampshire and Massachusetts — that do allow this.

"We're also proposing greater access to association health plans and also opening the door, in a careful way, to some short-term limited duration plans, which are really an opportunity of last resort for folks," Samson said. "And we know there are thousands of them due to the expiration of the enhanced premium tax credits that simply cannot afford insurance anymore. So they have no coverage whatsoever. It's important that they have some stop-gap options."

He said H.585 would create site-neutral billing, which would keep the cost of a procedure or test from costing more depending on where it's done.

"We have a health care system that is dominated by large hospitals and hospital networks. What a site-neutral billing proposal would do, which is in 585, is ensure that services like labs and imaging that can safely and appropriately be delivered in an office setting, and in fact are delivered frequently in an office setting, are not charged at a hospital rate," he said.

H.585 proposes giving insurers more power to audit and review claims.

The bill proposed putting two Governor-appointed seats on the board of nonprofit domestic health insurers, he said.

"There's very difficult choices ahead, and it's a very challenging environment in Vermont to bring affordability back into line," he said.

Samsom said few of the proposed changes will be easy.

"I find myself in a situation, and I believe everyone who's spoken today can acknowledge that there aren't a lot of win-win situations left. We're trying to find them and execute on them, but what really drove us to put together some of these proposals was an understanding that if we don't make some changes and rethink certain things, we are doomed to repeat or even continue the trajectory we are on. And clearly that trajectory is not working for a lot of Vermonters and Vermont businesses," Samsom said.

"I don't think this necessarily means the aging population would be paying more," said Scott after being questioned on the age premiums. He said it means more opportunities for younger people to be in the health insurance system.

Scott said other states with similar age demographics as Vermont's have done this and it's worked.

Samsom said what Vermont is proposing is a 5% difference in premiums depending on age, where the Affordable Care Act allows as much as a 300% difference.

Jenney Samuelson, secretary of Agency of Human Services, said Vermont's health care system was built over time for an environment that no longer exists.

"It was designed around in-person care, hospital-based delivery, and independent institutions often operating largely on their own," she said. "But Vermont has changed. We're older. We're more rural. Technology has changed, which allows us to deliver care in different ways. And workforce shortages now affect almost all of the health care system.

Vermont will receive $1 billion over the next five years from the federal Rural Health Transformation Program. Samuelson said the state has already received $195 million of that. Funding isn't reform, she said, but the plan for this money is to use it to transform the state's health care system into something more affordable.

"By March, we'll have actionable proposals aimed at taking the first steps in defining essential services, sharing services and infrastructure, reducing duplication and administrative costs, and aligning care that the community needs with affordability as a requirement and not an afterthought," she said.

Owen Foster, chair of the Green Mountain Care Board, said the board has taken measures over the years to tamp down health care costs.

"Reducing spending at hospitals and insurance companies alone is not a solution. We need system wide change to increase preventative care and access to non-hospital providers," he said

The bills passed into law since around 2022 have laid the groundwork for these changes, said Foster.

keith.whitcomb

@rutlandherald.com